Democratic Party of Multnomah County Calls for Glass-Steagall. Who's Next?

May 14, 2011 • 10:44AM

The following resolution was passed at the meeting of the Multnomah County Democratic Party, which includes the city of Portland, on May 12, 2011.

RESOLUTION URGING CONGRESS TO RETURN TO THE BANKING ACT OF 1933

WHEREAS, an effective money and banking system is essential to the functioning of any economy; and

WHEREAS, such systems must function in the public interest, without bias that favors one segment of society over others; and

WHEREAS, from 1933 to 1999, the Federal Banking Act, also known as Glass-Steagall, laws did protect the public interest by separating and regulating commercial banking, investment banking, insurance companies and securities firms; and

WHEREAS, the lack of such protection since 1999 has encouraged financial industry segments to exploit the financial system for their own gain, in violation of the public interest and to the severe detriment of the economy and general welfare; and

WHEREAS, the U.S. Congress and Senate have attempted to restore the Banking Act of 1933/Glass-Steagall laws by means of S.2886 Banking Integrity Act (now under the jurisdiction of the Senate Banking Committee), Senate Amendment 3884, H.R. 4375 Glass-Steagall Restoration Act, H.R. 4377 Return to Prudent Banking Act, and H.R. 4461 Banking Integrity Act) to benefit our nation and people; and

WHEREAS, on April 12, 2011, H.R. 4377 was reintroduced as H.R. 1489 Return to Prudent Banking Act stating, to repeal certain provisions of the Gramm-Leach-Bliley Act and revive the separation between commercial banking and the securities business in the manner provided by the Banking Act of 1933, the so-called Glass-Steagall Act, and for other purposes; and

WHEREAS, on April 12, 2011, Kansas District Federal Reserve Governor Thomas Hoenig recommended reclassifying government subsidized financial institutions as Government Sponsored Enterprises for the purpose of preventing them from engaging in activities not prescribed under Glass-Steagall standards; and

WHEREAS, the Financial Crisis Inquiry Report, issued January 2011, finds that our financial system is, in many respects, still unchanged from what existed on the eve of the crisis and the U.S. financial sector is now more concentrated than ever in the hands of a few large, systemically significant institutions.

NOW THEREFORE, Be it resolved by the Democratic Party of Multnomah County, Oregon that:

The Democratic Party of Multnomah County urges the United States Congress, in order to prevent American taxpayers from having to bail-out financial institutions, to enact legislation to reinstate the Banking Act of 1933 laws to prohibit commercial banks and bank holding companies from investing in stocks, underwriting securities, investing in or acting as guarantors of derivatives transactions; and that the Democratic Party of Multnomah County shall transmit a copy of this Resolution to Senator and Member of the Senate Banking Committee Jeff Merkley, Senator Ron Wyden, Representatives Earl Blumenauer, David Wu and Kurt Shraeder, and to Oregon State legislators representing districts in Multnomah County.